Competition spurs firms to eye salary increases for first-year associates

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First-year associate salaries are on the rise at some Pennsylvania firms, with at least one firm that has a presence in the state paying out $160,000 to new associates this year.

DLA Piper, which has around 40 lawyers in Philadelphia, will pay first-years $160,000 this fall, according to information on first-year hiring provided by the firm. That is up from $145,000 paid to Pennsylvania first-year associates in years past. But the firm doesn’t currently have any first-year associates scheduled to start in Pennsylvania this fall.

DLA Piper’s increase in Philadelphia, were any associates to benefit from it, puts the firm above the market high of $145,000 paid by firms such as Morgan, Lewis & Bockius, Dechert and Duane Morris.

Pennsylvania firms have generally only employed the $160,000 marker in their New York offices.

Paying $160,000 for first-year associates was something Reed Smith’s New York office partners were looking to do for some time, according to a report from Legal Intelligencer affiliate New York Law Journal. The paper reported that Reed Smith was increasing its starting salary come Jan. 1 to $160,000 in New York in an effort to match the market rate.

As the firm looks to grow its New York office, competitive starting salaries were viewed as a necessity.

“We’re a big player here, and we ought to be one and act like one,” Douglas Wood, New York office managing partner, told the New York Law Journal, adding the pay helps the firm compete for the best talent.

Saul Ewing has increased its starting salary as part of its effort to attract top talent, managing partner Barry Levin said. The firm increased starting pay from $125,000 last year to $135,000 this year. Saul Ewing has gradually increased its starting pay back to its height of $135,000 in 2008 since reducing it post-recession to $110,000.

“As a practical matter, we are trying to service our clients and in order to do that we want to make sure we have the strongest cadre of candidates for our associate ranks as possible,” Mr. Levin said.

While he agreed the smaller class sizes firms employ post-recession mathematically make it easier to pay higher salaries, he said the firm doesn’t look at it that way but rather tries to remain competitive as it plans out its hiring one to two years in advance.

Altman Weil principal Ward Bower said starting salaries have been relatively static for the past five years. He said some firms may feel that, given that their economic performance is improving, it might be a good time to make a move on starting salaries.

Mr. Bower also attributed a rise in starting salaries to the “tremendous amount of publicity” that has been given to law school debt. He said firms could be looking to ease their associates’ debt burdens and create a positive effect on morale.

While salary wars among law firms have not been in vogue since right before the Great Recession, competition among law firms for top talent could result in the return of firms increasing salaries to match their competitors.

“I think eventually, if the legal economy stays solid, we’ll see some of that come into play in order to get the best graduates they can possibly attract,” Mr. Bower said.

While that may be good for the law school graduates vying for these jobs, increasing salaries doesn’t solve the years-old problem of how law firms select the associates they hire, he said.

“A lot of these firms haven’t really figured out how to select new hires other than to hire the top graduates of the best law schools that they can attract,” Mr. Bower said.

But the success rate for that approach has not been good given the financial investment firms are making on these young associates, he said. If firms were identifying top talent based on prior work or military experience, for example, then paying top salaries to get those people would make sense, Mr. Bower said.


Gina Passarella can be contacted at 1-215-557-2494 or at gpassarella@alm.com. Follow her on Twitter @GPassarellaTLI. To read more articles like this, visit www.thelegalintelligencer.com.

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